Should you offer free consulting? (part 2)

Consulting Questions and Answers

I got some interesting responses to my earlier post asking, “Should you offer free consulting?” In this post, I’ll reveal my paradigm shift compared to when I first started my consulting business to my current thinking, and the results I’ve gotten.

Before we get into my answer, if you’ve struggled to get clients, I want to hear from you. Take just a quick minute to tell me right now, or even send me a voice mailI read and listed to every response, and will answer the best questions.

Should you offer free consulting? (what I used to do)

First, here’s what I found when I first started consulting, and tried billing for all my time instead of offering free consulting.

Essentially, I ended up billing lots of tiny invoices to clients, then feeling lousy about it. Basically, I knew I was nickel-and-diming clients, but hadn’t yet articulated the feeling.

It was actually stressful to email or call to follow up on these small, $100-$200 invoices. It sapped my energy, and diverted my focus from attracting and converting high-value prospects.

A better approach

As you’ve probably guessed, I’ve shifted my thinking, so that I do some free consulting initially for prospects.

For existing clients, as I’ve said in other posts, I’ve shifted away from hourly billing to mostly flat-fee pricing for projects. Flat-fee pricing has dramatically boosted my effective hourly rate (i.e., effective hourly rate = revenue earned / hours worked), so that it’s not uncommon for me to earn $300 – $1,000/hour. And for existing clients, even when I do bill hourly, I don’t bill for all my time; I often write off/discount quarter or half-hour tasks and display that discount on their invoice as a sign of goodwill.

For prospects, since I’m focused more on doing flat-fee pricing, I may do several calls–and thus several hours–with a prospect before even sending them a proposal. Some of that time may even be technical work, which may or may not be on a larger project that I expect to land.

Basically, this free consulting builds trust and credibility.

It’s just a matter of time before money changes hands

My mindset now is that it’s just a matter of time before money changes hands.

This is a fundamentally different mindset than “get paid for every minute”, and isn’t about scarcity, but abundance. Abundance refers to seeing the world as a place where there are a wealth of opportunities.

I’ve found that an abundance mindset leads to more opportunities over time. This isn’t some new-age, woo-woo thing. It’s about being confident in your ability to deliver value, as well as targeting high-value prospects, rather than nickel-and-diming everyone.

A real-life example

If you’re still not sure how to answer the “should you offer free consulting” question, here’s a real-life example. This is from an actual prospect (not yet client, but soon to be) that I’ve talked to a couple times.

Here’s the actual email I received just yesterday (click the image to read the entire email):

Free consulting -- actual client email 2014-03 -(callout highlighted)

See how this works?

If you read the entire email, notice a couple things:

  • After I provided value in a prior call, she wants to give me MORE work. In fact, at least 3 projects, plus the small (free) project I’ve started with her.
  • She actually tells me to bill her for my work.
  • SHE ask ME to do another call with her. In other words, I’m not pursuing her; the PROSPECT is pursuing ME.

Can you see how powerful offering free consulting can be?

The “drug dealer” strategy

Answering “yes” to “should you offer free consulting?” is basically the same strategy that drug dealers use:

  • Give prospects a taste of what you provide.
  • After they’re hooked, they have to pay to keep the good times rolling.

Yes, dealing smack might be more lucrative than consulting, but it has its drawbacks–demanding clientele, dangerous situations, shady characters, threats of bodily harm. Well, maybe being a drug dealer has more in common with consulting than I originally thought.

In any case, the “free consulting” is more about establishing trust & credibility and a building a working relationship, while still showing you can provide amazing value.

A framework that works

Before you offer free consulting to everyone and their goldfish, here’s a framework to keep you out of trouble:

  • Research prospects to ensure you’re ONLY targeting high-value ones. Don’t waste your time and energy on budget-focused prospects who don’t want to pay for value, want to negotiate your prices, or who you need to hound to collect payment.
  • Find out what the prospect wants, then give it to them without any expectation of return.
  • Set a clear boundary on exactly what (how much) you’re willing to do, and lay out the next steps (i.e., what a continuing engagement looks like). You won’t lay out the next/paid steps initially, but later, during the course of doing the free consulting for the prospect. There’s no point telling them what a paid engagement looks like if they don’t value your free work, so make your free work amazing.

Tell me where you’re at

I’m going to make a big announcement next week, but before then, I want to hear from you.

Have you struggled to get clients?

What have you tried?

Take just a quick minute to tell me right now.

Or even send me a voice mail.

I read and listed to every response, and will answer the best questions.

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